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Waynesville presents grave budget message

Waynesville Town Manager Rob Hites, an experienced professional with almost 40 years in municipal government, called the current budget year a strange one, and apparently town aldermen have heard him loud and clear. 

“We had a freeze on non-essential spending and hiring pretty much as soon as the State of Emergency came in,” Hites said during a May 12 budget presentation to the board. “We very well could spend a million between finishing off this fiscal year and next year’s budget.”

A projected downturn in revenue due to the disruptive effects of the Coronavirus Pandemic will necessitate the use of fund balance, and if it’s severe enough, that could jeopardize the town’s standing with the Local Government Commission’s mandated fund balance levels. 

In particular, Hites is concerned about sales tax revenue. With many businesses closed for part of March, all of April and much of May — thus far — the impact hasn’t yet been felt but most assuredly will be. 

“We are a tourist town and we’re going to take a huge hit,” Hites said, noting an 8 percent projected decline that he admitted may be optimistic. “What the economists are saying is that the sales tax will come back slowly, so this may last three fiscal years.”

After the Great Recession of 2008, Hites said, it was four or five years until governments could say they’d returned to “normal” revenue levels. 

State sales tax collections data lags by two months, so April’s numbers have yet to be released. Hites said that the Christmas season will be a great indicator of how sales tax revenues are doing.

It’s all a bitter pill to swallow, considering the town was looking forward to a number of factors that would have created a sizable bump in revenue.

A countywide property revaluation currently underway would have added to the town’s tax rolls in 2021, but now if an increase does occur, that revenue will likely have to be used to make up for losses during the pandemic. 

“It involves the market value of real estate, and we’re certainly in a slump but I haven’t heard that the slump is bad enough to affect the market,” Hites said, adding that low interest rates are helping the market remain attractive for buyers. 

In lieu of the regular 6:30 p.m. meeting, the Town of Waynesville will hold a budget review session at 3 p.m. on Tuesday, May 26, at the Public Services building, 129 Legion Drive. For more information, visit www.waynesvillenc.gov.

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